The Federal Emergency Management Agency (FEMA) is rolling out changes when it comes to flood insurance rates across all states in the country. Today, we will unpack these changes coming to Nevada and how they can impact your flood insurance in the future.
Today, we travel to the land of casinos and the Battle Born State of Nevada. We won't do cards and all that, but instead, discuss the upcoming changes to federal flood insurance. We'll understand how the National Flood Insurance Program's (NFIP) Risk Rating 2.0 will help our friends over in Nevada be battle born against flood risks across the state.
Nevada, just like all fifty states, is an equally flood-prone area. You have to take into account that even valleys and mountains can become the biggest flood risk. We've seen this happen where these higher areas would funnel rain into low-lying areas, immediately flooding communities with a rush of flood water. There's also the concern of El Nino wherein the drier soil makes it seem like you're dumping water into cement.
The Risk Rating 2.0 will impact flood rates across the United States and will start to take effect on October 1, 2021.
The NFIP 2.0
The Risk Rating 2.0, or commonly known as NFIP 2.0 as well, is more of a move of equity. This update on the federal flood insurance program itself will allow you to no longer pay more than your fair share when it comes to premiums as this would now be based on the value of your property or home starting this October.
It's important to keep in mind that the market value of these individual properties isn't the only determiner of your flood insurance premiums. FEMA and the NFIP generally look into multiple things when assessing the flood insurance policy for homeowners. You might also want to look out for these:
- Overall flood risk and flood hazard on your insured building/structure
- Flood maps zoning (Flood Insurance Rate Maps) and flood plain devolvement
- History of flood damage and flood loss
- History and frequency of flood claims
- Mitigation efforts against flooding. Is your lowest grade above the base flood elevation?
When it comes to the rate changes happening across the country, you're going to see these colors in ranges which represent these changes with flood insurance rates from FEMA. Now, each of these colors represents the good, the bad, and the ugly changes coming to each state.
First, let's talk about that green slice and the good change coming with it. This is generally one of the extreme ranges you'll see in these reports and for the state of Nevada, it will cover 21% or 2,195 policies that FEMA currently has active in the state.
This is a good change because it will start a decrease in flood insurance rates starting this October. The decrease may be more than $100 ($1200 per year) and can kick in immediately for policyholders in this slice.
Next up, we want to talk about the upcoming bad change which will impact most of the active FEMA policies in Nevada. This is a bad change due to the small increase you'll get from the Risk Rating 2.0.
This blue slice is composed of 73% or 7,808 of the active policies in the state. These people are expected to get flood insurance rate increase ranging from $0 to $10 per month ($0 - $120 per year).
Finally, we want to cover the last two slices of change you'll see in these Risk Rating 2.0 reports. We show these as the pink/magenta and grey slices respective. It's notable that the grey slice is significantly an uglier change compared to the pink/magenta portion.
Starting with that pink slice, this will cover 3% or 304 policies in Nevada. Policyholders in this will get an increase ranging from $10 to $20 per month ($120 - $240 per month) on their flood insurance rates with FEMA.
The grey slice on the other hand will cover another estimated 3% or 278 policies over Nevada federal flood policies. This is the uglier change because the increase will be more than $20 per month (>$240 per year). This means that you may easily get that $100 per month ($1200 per year) increase.
You can see the full pie graph of the Risk Rating 2.0 changes in Nevada below:
When Will It Happen?
Now, the date when you can adopt this program really depends if you're doing a renewal or if it's a new business policy. You see, you can expect these changes to start on October 1st and you're going to adapt to these rate changes if you're buying flood insurance from FEMA on or after that date.
On the other hand, if you're doing a renewal with FEMA after that date then you don't have to take in these new rate changes until April 1st, 2022.
So, you want to be very ready for this. We've been talking about this since last year since basically the NFIP is already 30 years old already and is in need of this change.
If you have questions on these upcoming changes, what are your flood insurance options in Nevada, or anything about flood, reach out to us through the links below. You can also watch this on our YouTube channel.
Remember, we have an educational background in flood mitigation and we want to help you understand flood risks through education and awareness in flood insurance and preparedness.